Indian Commodity exporters faces Global economic slowdown

NEW DELHI : The sharp fall in global freight rates from a highof$18,000to$750invarioussectorssuchastheUSand Europe has not brought any cheer among businesses in export-import trading. The export-import sector is unable to take full advantage of the situation due to the overall dullnessindemandduetoglobaleconomicslowdown.

The Covid situation had forced shipping lines to hike freight cost between 2020 to mid-2022 to cover up their expensesduetovesseldelays,holdingupofcontainersetc. Now, the rates have started sliding since January even belowthepre-Covidtimes.Thesouthwardmovementtoas low as $750 in the Europe sector started benefiting customers, exporters, importers, said Prakash Iyer of CochinPortUsersForum.

Despite the common feeder prices still ruling higher, Iyer said shipping lines are offering lower rates to exporters to withstandthecompetition.

Recessionplaysspoilsport

Mahadevan Pavithran, a coir exporter in Alappuzha, said the industry would not be able to benefit from the lower ocean freight rates, thanks to recession across global markets and Russia-Ukraine conflict. The drop in coir exports were around 30 per cent which is expected to continuethewholeyear.

Coir business, he said, was down by 30-50 per cent and the priority is to survive in this lean period by focussing on nichemarketswithproductspecialisationandquality. The industry is sustaining now only because of the focus shift of China from procuring coir pith from India to VietnamandIndonesia.

This has led to dropping of coir pith prices in the domestic market, enabling the industry to keep afloat during this phase. The rise in demand for upholstery business has facilitated China to look at proximity centres for purchase, hesaid.

Impactonseafoodsector

Seafood exports are also muted on account of subdued salesacrosstheUSandEurope.AlexKNinan,presidentof the Seafood Exporters Association of India – Kerala region, said the export business was down by 15 per cent due to the US recession and the case is similar with Europe.

With the availability of sufficient stocks in supermarkets, there is a considerable reduction in purchase even for the ensuingEasterseason.

According to Prakash Namboodiri, All India Spices Exporters Forum, the declining freight rate would benefit customers in a big way. But the overseas market, especially the US and Europe, is not so conducive due to recession, forcing consumers to buy hand to mouth. The growing regulatory concern due to pesticide issues in Europeisalsoposingaproblem.